Africa PE and PP prices stabilise following recent upswing

LONDON (ICIS)–Supply and demand have swung in to balance in the African polyethylene (PE) and polypropylene (PP) markets, leaving prices stable, although there are mixed views on activity.

Demand is down in the rainy season, especially for high density polyethylene (HDPE) film, which is mostly used for water pouches.

Demand for water pouches drops significantly in the rainy season.

Prices rose through June and early July on the back of rising feedstock costs and increasing prices in Asia.

Allocations to Africa have been cut as suppliers from Asia and the US focus their attentions on China. This has left the Middle East producers in a strong position as the major providers to the continent.

It has also led to less price competition as Middle East-origin material is usually offered in similar ranges. As a result, product ranges have narrowed.

Demand has not strengthened as quickly, resulting in a more balanced market.

Buyers attitudes currently vary significantly. Some are pre-buying on fears about price rises and others are holding off on fears about a second wave of the coronavirus.

HDPE blow moulding is tight in East and West Africa, as demand for detergent bottles is high. Interest in HDPE film has dropped following the beginning of the rainy season.

PP has more length than PE as it has seen less of a boost from the packaging industry.